Name: MD Muhib Ullah

ID: 111 161 261

Chapter 6
Debt: Debt is cash acquired by one gathering from another. Numerous organizations and people
use obligation as a strategy for making huge buys that they couldn't bear the cost of under typical
conditions.

Short-term debt: Short-term obligation, additionally called current liabilities, is an association's

budgetary commitments that are required to be paid off inside a year. It is recorded under the
present liabilities segment of the complete liabilities segment of an organization's monetary
record.

Long-term debt: Long-term obligation is obligation that develops in over one year, and is
regularly rewarded uniquely in contrast to momentary obligation. For a guarantor, long haul
obligation is a risk that must be reimbursed while proprietors of obligation represent them as
resources.

Bond: A security is a fixed pay interest in which a speculator advances cash to an element
(corporate or administrative) that acquires the assets for a characterized timeframe at a fixed loan
fee.

Kind of bonds giving below:

• Government bonds
• Corporate bonds
 • Mortgage bonds
• Debenture bonds
• Income bonds
• Zero-coupon bonds
• Junk bonds

Sinking Fund: A sinking store is a reserve built up by a monetary substance by putting aside
income over some undefined time frame to support a future capital cost, or reimbursement of a
drawn out obligation.

Call Provision: A call arrangement is a specification on the agreement for a bond or other fixed-
salary instruments that permits the backer to repurchase and resign the obligation security.

Convertible Feature: A convertible bond pays fixed-salary intrigue installments, yet can be
changed over into a foreordained number of basic stock offers. .A convertible bond offers
financial specialists a kind of half and half security that has highlights of a bond, for example,
intrigue installments, while additionally having the alternative to claim the fundamental stock.

Foreign Debt: An outside security is a security given in a household showcase by a remote

substance in the residential market's money as a method for raising capital.

Premium Fund: An advance premium store exists when insurance agencies who get advance
premiums must record for the unmerited bit of these premiums as a different obligation thing on
their monetary records. This thing is usually alluded to as the development premium store or
record.

Call Price: The call cost is the value a bond backer or favored stock guarantor must
compensation speculators in the event that it needs to repurchase, or call, all or part of an issue
before the development date.

Yield maturity: The respect development, book yield or recovery yield of a security or other
fixed-premium security, for example, gilts, is the inward pace of return earned by a financial
specialist who purchases the security today at the market
Chapter 7
Preferred Stock: inventory that entitles the holder to a fixed dividend, whose price takes
priority over that of ordinary proportion dividends.

Par Value: Par fee is the face fee of a bond. Par price is crucial for a bond or fixed-earnings
instrument as it determines its maturity fee as well as the dollar cost of coupon payments.

Cumulative Dividends: A cumulative dividend is a proper related to positive preferred stocks of

a employer. A cumulative dividend need to be paid, whereas a normal dividend, also referred to
as a non-cumulative dividend, may additionally or may not be shareholders on the agency's
discretion.

Maturity: in finance, adulthood or maturity date is the date on which the very last price is due
on a loan or other financial instrument, inclusive of a bond or term deposit, at which point the
major and all ultimate interest is because of be paid.

Convertibility: is the great that allows money or different financial contraptions to be

transformed into different liquid shops of fee.

Conversation Price: the conversion price is the fee in step with proportion at which a
convertible safety, which includes corporate bonds or favored stocks, can be transformed into
commonplace inventory.

Some other provisions on occasion located in desired stock include the following

• Call provision.
• Sinking fund
• Participating.

Common Stock: Common stock is a safety that represents ownership in a corporation. Holders
of not unusual inventory opt for the board of administrators and vote on company policies.
Common stock is reported inside the stockholder's fairness segment of a corporation's balance
sheet.
Par Value: Par price is a according to proportion quantity that will appear on some inventory
certificate and inside the corporation's articles of incorporation. In the case of common inventory
the par price in keeping with share is usually a very small quantity inclusive of $0.10 or $0.01
and it has no connection to the market value of the share of inventory.

Dividends: A common stock dividend is the dividend paid to commonplace inventory

proprietors from the income of the company. Like other dividends, the payout is in the shape of
either cash or inventory.

Two types of dividends giving bellow

1. Income stocks
2. Growth stocks.

Maturity: is the date on which a bond or favored inventory issuer should pay off the original
primary borrowed from a bondholder or shareholder.

Control of the firm: Control refers to having sufficient quantity of voting stocks of a company
to make all corporate decisions.

Proxy: A proxy is an agent legally authorized to behave on behalf of another birthday

celebration or a format that permits an investor to vote with out being physically gift on the
meeting.

Proxy Fight: A proxy combat is the movement of a collection of shareholders becoming a

member of forces, in a bid to gather enough shareholder proxies to win a company vote.

Takeover: Takeover takes places while one organization makes a bid to expect manipulates of
or accumulate another, often through shopping a majority stake in the target firm.

Preemptive Rights: Preemptive rights are a clause in an option, security or merger agreement
that gives the investor the right to maintain his or her percentage possession of a corporation
through buying a proportionate quantity of shares of any future problem of the safety.

Types of not unusual inventory are giving bellow

• Founders share
• Closely held cooperation’s

• Publicly owned corporation’s

Foreign Equity Market: Foreign Equity Market. The buying and selling of stocks issued in a
positive country by using a overseas publicly-traded business enterprise.
Chapter 8
Risk: In finance, risk refers to the degree of uncertainty and/or potential monetary loss inherent
in an funding decision. In general, as investment dangers rise, traders seek higher returns to
compensate themselves for taking such risks.

There are two kinds of Risk:

• Stand Alone Risk

• Portfolio Risk

Return: In finance, return is a income on an investment. It comprises any change in cost of the
investment, and/or cash flows which the investor gets from the investment, such
as interest payments or dividends. It can be measured both in absolute terms and as
a percentage of the quantity invested.

There are two types of return:

• Historical Return

• Expected Return

Stand alone hazard: Stand Alone risk is the danger of an investment if it's miles held in
isolation and not as a part of a well - diverse portfolio. Stand alone hazard is measured with the
aid of the usual deviation of the funding again.

Portfolio threat: portfolio danger isn't the weighted common or common of the man or woman
securities threat rather it is highly influenced by means of the correlations a few of the securities
included within the portfolio.

What is beta?
Beta measures the sensitivity of the safety returned to the changes within the marketplace charge
of return. Beta additionally measures the portfolio dangers.

Portfolio goes back: Portfolio return is the weighted average of the individual securities goes
back included inside the portfolio or portfolio return.

Portfolio Beta: Portfolio Beta is the weighted average of the person beta’s included inside the
portfolio.

Firm specific chance: company specific danger is the hazard which may be reduced with the aid
of diversification and firm specific risk is additionally called the diversifiable danger due to the
fact in case you a company is dealing with any problem like proceedings or strikes then the
chance can be different by using the other corporations like if the other firms offers high price of
go back .

Market risk: Market danger is also called the non- diversifiable danger because if you are in the
marketplace and investing then you cannot keep away from or dispose of it. It can't ne diversified
because it will affect each company and the economy like inflation. Market danger is also
referred to as the applicable hazard because marketplace will come up with return and it cannot
be varied or avoid it's also called systematical hazard.

CAMP (capital Asset Pricing Model) debt rate is interest and equity charge is return

CAPM argues that the best relevant chance is market danger and the investors get return on their
investment most effective for assuming the marketplace chance and the marketplace go back will
be determine by way of the beta.